Korean Chemical Firms Keeping Tabs on Situation
The Chinese government has banned the use of disposable plastic products, such as plastic dishes and bags, in major cities. Plastic parcel packaging is prohibited as well.
South Korean petrochemical companies are watching the situation closely as a rapid decline in disposable plastic demand may affect their plastic manufacturing. China is the world’s largest plastic manufacturer and consumer. It has reduced its plastic imports by large-scale facility expansion since the late 2000s and South Korean companies’ degree of dependence on exports to China is still high.
“South Korean companies are focusing on high value-added products and materials rather than universal products such as disposable plastic and, as such, an immediate impact is unlikely,” said a South Korean chemical company, adding, “Still, lower product prices attributable to a decline in demand may be inevitable in the long term.”
The ban is scheduled to be implemented nationwide in 2026. Under the circumstances, the prices of polyolefin, polyvinyl chloride, and the like are forecast to fall after the use of such materials soared last year in the wake of COVID-19. In addition, it is pointed out that how successful South Korean chemical companies will be in developing bioplastics will determine their survival. The biomass- or microbe-based plastics completely degrade in six to 12 months whereas petroleum-based plastics require more than 500 years.
South Korean companies are increasing their investments for bioplastic development. Lotte Chemical, which developed the first bio PET in South Korea in 2012, is trying to expand the market. In the country, the annual bio PET sales volume increased from 101 tons to 1,528 tons from 2017 to 2019. The volume was 1,487 tons in the first three quarters of 2020 and the annual total for that year is estimated at 2,000 tons.
SKC is aiming to begin manufacturing polybutylene adipate terephthalate (PBAT), a high-strength bioplastic material, this year. LG Chem, which developed the world’s first additive-free biodegradable plastic last year, is trying to turn it into products by 2025. CJ Cheil Jedang is going to build polyhydroxyalkanoate (PHA) manufacturing facilities with an annual capacity of 5,000 tons in Indonesia this year. PHA is characterized by being fully degradable in seawater.
Samyang Innochem’s isosorbide production facility expansion is scheduled to be completed in the second half of this year. Hanwha Solutions and the Korea Institute of Energy Research signed a business agreement on Jan. 15 for joint bioplastic development.